New Delhi: The government on Monday said losses incurred by state-run oil marketing companies (OMCs) remain slightly below Rs 600 crore a day despite four rounds of fuel price hikes in last two weeks.
Both petrol and diesel prices have cumulatively increased by about Rs 7.5 per litre during this period.
“Earlier oil marketing companies were incurring a loss of Rs 1,000 crore per day, but after recent price hikes, the loss is still at slightly below Rs 600 crore,” Sujata Sharma, joint secretary at the Ministry of Petroleum and Natural Gas, told reporters at an inter-ministerial press briefing on West Asia conflict Monday.
The under-recoveries, she said, include losses on petrol, diesel and liquefied petroleum gas (LPG).
Responding to questions on the substantial profits earned by OMCs in the previous financial year amid lower global crude prices and relatively high retail fuel prices, Sharma said those gains would be erased in just one quarter because of the current losses.
“Last year’s OMC profits will be wiped out within a quarter at the present rate of losses,” she said.
Defending the profitability of the state-owned oil marketing companies, Sharma said they remain strategic national assets.
“India’s OMCs are an asset to the country; whatever profits these companies earn are distributed among government as tax which is being used for welfare, while remaining profits are being used for capital expenditure (CAPEX) purposes,” Sharma said.
She added that is it due to this CAPEX that India’s refining capacity is expected to increase to 300 million metric tonnes over the next three years from the current 258 million metric tonnes.
Defending the fuel price hikes, Sharma said global prices of motor spirit (MS) or petrol and high-speed diesel (HSD) have risen much faster than retail prices in India.
She said that prices of motor spirit (petrol) have increased 22 percent and high-speed diesel 27 percent, globally. In comparison, retail prices in India have risen only 7.7 percent for petrol and 8.6 percent for diesel.
According to Sharma, the Centre had taken several steps to shield consumers before allowing retail fuel prices to rise.
She noted that the government reduced excise duty by Rs 10 per litre each on petrol and diesel in March, resulting in a revenue loss of around Rs 14,000 crore per month.
On domestic LPG supplies, Sharma said booking and delivery trends were gradually returning to normal.
“For domestic LPG cooking gas supply, about 1.72 crore cylinders have been delivered in the last four days against bookings of 1.66 crore, with 95 percent deliveries completed with authentication codes,” Sharma said.
She added that the backlog of LPG cylinder deliveries was steadily declining.
“We are witnessing a gradual decline in backlog of LPG cylinders. The delivery time which was increased to more than 5 days has now started to come down to 4.5 days,” Sharma said.
On efforts to expand the piped natural gas (PNG) network, Sharma said infrastructure has already been created for 2.87 lakh PNG connections that are ready for gas supply, while more than 8.27 lakh consumers have registered for PNG connections since March.
(Edited by Viny Mishra)
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